Last month, the IRS released the draft 1095-C Form, giving businesses focused on ACA Compliance the opportunity to prepare for the 2024 ACA filing season.
Electronic Filing Requirement for ACA Compliance in 2024
One of the key changes in ACA Compliance for 2024 is the mandatory electronic filing of 1094-C and 1095-C Forms (read a brief synopsis of the rule change here). All employers must e-file these forms to meet ACA Compliance requirements. Ensure that your systems are set up to handle this electronic submission and stay ahead of the deadlines.
Line 14 Codes for ACA Compliance Remain Unchanged
A positive aspect for businesses focusing on ACA Compliance is that the codes for Line 14 (Employer Offer of Coverage) remain unchanged. This consistency makes it easier for companies to continue meeting their reporting obligations. Below is a recap of the existing codes to assist with your ACA Compliance efforts.
| Line 14 Code | Description for Use |
|---|---|
| 1A | Qualifying Offer: Minimum essential coverage (“MEC”) providing minimum value offered to full-time employee with Employee Required Contribution equal to or less than 9.5% (as adjusted) of mainland single federal poverty line and at least MEC offered to spouse and dependent(s). |
| 1B | MEC providing minimum value offered to employee only. |
| 1C | MEC providing minimum value offered to employee and at least MEC offered to dependent(s) (not spouse). |
| 1D | MEC providing minimum value offered to employee and at least MEC offered to spouse (not dependent(s)). Do not use code 1D if the coverage for the spouse was offered conditionally. Instead, use code 1J. |
| 1E | MEC providing minimum value offered to employee and at least MEC offered to dependent(s) and spouse. Do not use code 1E if the coverage for the spouse was offered conditionally. Instead, use code 1K. |
| 1F | MEC NOT providing minimum value offered to employee; employee and spouse or dependent(s); or employee, spouse, and dependents. |
| 1G | Offer of coverage for at least one month of the calendar year to an individual who was not an employee for any month of the calendar year or to an employee who was not a full-time employee for any month of the calendar year (which may include one or more months in which the individual was not an employee) and who enrolled in self-insured coverage for one or more months of the calendar year. |
| 1H | No offer of coverage (employee not offered any health coverage or employee offered coverage that is not MEC, which may include one or more months in which the individual was not an employee). |
| 1I | Reserved for future use. |
| 1J | MEC providing minimum value offered to employee and at least MEC conditionally offered to spouse; MEC not offered to dependent(s). (See Conditional offer of spousal coverage, earlier, for an additional description of conditional offers.) |
| 1K | MEC providing minimum value offered to employee; at least MEC offered to dependents; and at least MEC conditionally offered to spouse. (See Conditional offer of spousal coverage, earlier, for an additional description of conditional offers.) |
| 1L | Individual coverage HRA (“ICHRA”) offered to employee only with affordability determined by using employee’s primary residence location ZIP code. |
| 1M | ICHRA offered to employee and dependent(s) (not spouse) with affordability determined by using employee’s primary residence location ZIP code. |
| 1N | ICHRA offered to employee, spouse, and dependent(s) with affordability determined by using employee’s primary residence location ZIP code. |
| 1O | ICHRA offered to employees only using the employee’s primary employment site ZIP code affordability safe harbor. |
| 1P | ICHRA offered to employee and dependent(s) (not spouse) using the employee’s primary employment site ZIP code affordability safe harbor. |
| 1Q | ICHRA offered to employee, spouse, and dependent(s) using employee’s primary employment site ZIP code affordability safe harbor. |
| 1R | ICHRA that is NOT affordable offered to employee; employee and spouse, or dependent(s); or employee, spouse, and dependents. |
| 1S | ICHRA offered to an individual who was not a full-time employee. |
| 1T | ICHRA offered to employee and spouse (not dependents) with affordability determined using employee’s primary residence location ZIP code. |
| 1U | ICHRA offered to employee and spouse (not dependents) using employee’s primary employment site ZIP code affordability safe harbor. |
Additionally, the codes for Line 16 (Safe Harbor determination) have remained the same – to recap, these codes are below:
| Line 16 Code | Description for Use |
|---|---|
| 2A | Employee not employed during the month. Enter code 2A if the employee was not employed on any day of the calendar month. Do not use code 2A for a month if the individual was an employee of the ALE Member on any day of the calendar month. Do not use code 2A for the month during which an employee terminates employment with the ALE Member. |
| 2B | Employee not a full-time employee. Enter code 2B if the employee is not a full-time employee for the month and did not enroll in MEC, if offered for the month. Enter code 2B also if the employee is a full-time employee for the month and whose offer of coverage (or coverage if the employee was enrolled) ended before the last day of the month solely because the employee terminated employment during the month (so that the offer of coverage or coverage would have continued if the employee had not terminated employment during the month). |
| 2C | Employee not a full-time employee. Enter code 2B if the employee is not a full-time employee for the month and did not enroll in MEC, if offered for the month. Enter code 2B also if the employee is a full-time employee for the month and whose offer of coverage (or coverage if the employee was enrolled) ended before the last day of the month solely because the employee terminated employment during the month (so that the offer of coverage or coverage would have continued if the employee had not terminated employment during the month). |
| 2D | Employee in a section 4980H(b) Limited Non-Assessment Period. Enter code 2D for any month during which an employee is in a section 4980H(b) Limited Non-Assessment Period. If an employee is in an initial measurement period, enter code 2D (employee in a section 4980H(b) Limited Non-Assessment Period) for the month, and not code 2B (employee not a full-time employee). For an employee in a section 4980H(b) Limited Non-Assessment Period for whom the ALE Member is also eligible for the multiemployer interim rule relief for the month, enter code 2E (multiemployer interim rule relief) and not code 2D (employee in a section 4980H(b) Limited Non-Assessment Period). |
| 2E | Multiemployer interim rule relief. Enter code 2E for any month for which the multiemployer arrangement interim guidance applies for that employee, regardless of whether any other code in Code Series 2 (including code 2C) might also apply. This relief is described under Offer of Health Coverage in the Definitions section of these instructions. |
| 2F | Section 4980H affordability Form W-2 safe harbor. Enter code 2F if the ALE Member used the section 4980H Form W-2 safe harbor to determine affordability for purposes of section 4980H(b) for this employee for the year. If an ALE Member uses this safe harbor for an employee, it must be used for all months of the calendar year for which the employee is offered health coverage. |
| 2G | Section 4980H affordability federal poverty line safe harbor. Enter code 2G if the ALE Member used the section 4980H federal poverty line safe harbor to determine affordability for purposes of section 4980H(b) for this employee for any month(s). |
| 2H | Section 4980H affordability rate of pay safe harbor. Enter code 2H if the ALE Member used the section 4980H rate of pay safe harbor to determine affordability for purposes of section 4980H(b) for this employee for any month(s). |
Managing ACA Compliance may seem complex, but staying informed about the latest changes and keeping up with filing deadlines will help your business succeed. By reviewing the draft 1095-C Form and adjusting to the new e-filing requirement, you can ensure that your company remains in full ACA Compliance for the 2024 season.
How can Paragon Compliance help?
Let us help you – please reach out to clientservices@paragoncompliancellc.com for a quote or call us today!